Belarus Water Sector Framework

Location:

Belarus

Project number:

47419

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Target board date:

16 Dec 2015

Status:

Board Approved

PSD disclosed:

30 Jun 2015

Sub-projects signed under this framework

Translated version of this PSD: Russian

Project description and objectives

The EBRD is considering a € 40 million Belarus Water Sector Framework consisting of sovereign-guaranteed loans to water and wastewater companies in Belarus that will be co-financed with up to € 20 million capital expenditure grants from international donors to facilitate critical improvements in selected water supply and wastewater treatment services in Polotsk, Orsha, Lida and several other cities across Belarus, with the prime focus being reducing pollution of the Baltic Sea basin. The donors will be identified for each project separately.

The EBRD will sign a Loan Agreement with a respective company and a Project Support Agreement with a respective municipal authority in each case. Each loan will be guaranteed by the Republic of Belarus. In addition, TC funds will be mobilised to support project preparation, project implementation and institutional support.

Transition impact

Framework for Markets: In line with the objectives of the earlier engagement in the water sector, the current framework will aim to introduce tariff reforms for the participating utilities.

Demonstration of Successful Restructuring: For each participating utility due diligence will identify restructuring measures that will be implemented as part of the Corporate Development Programmes.

Setting Standards of Corporate Governance and Business Conduct: The utilities participating in the Framework will improve their disclosure standards, including publication on the website of each utility annual IFRS financials, investment summaries and performance against KPIs set in the PSC.

The expected transition impact rating is ‘good’.

The client

Information on each participating company is provided separately for each project.

EBRD finance

€ 40 million.

Total project cost

€ 68.38 million.

Environmental and social categorisation, impact, and mitigation

The Framework is not categorised; however, each sub-project under the Framework will be categorised at CRM stage and will undergo separate Environmental and Social Due Diligence (“ESDD”). The Framework will include municipal sub-projects that will finance water supply and wastewater treatment improvements in selected cities across Belarus, with prime focus on reducing pollution to the Baltic Sea basin providing environmental and social benefits to the serviced population.

ESDD for each subproject will be carried out by independent consultants as part of the Feasibility Study and will include at the minimum an assessment of potential E&S impacts and benefits, and an E&S audit of the management systems, operations and facilities of each participating City to help structure the priority investment programmes. The ESDD will also need to ascertain whether the proposed investments achieve drinking water quality and wastewater discharges that comply with local and EU standards, and every effort will be made to achieve the highest standards possible within the borrowing capacity of the utilities and affordability limits for the population. In case of NDEP co-financing, the projects will also need to achieve HELCOM recommendations for effluent quality exceeding national and EU standards.

ESAPs and Stakeholder Engagement Plans (SEPs) will be prepared for each sub-project. All subprojects categorised "A" or requiring a derogation from ESP will be submitted to Board for approval regardless of size of the loan.

Technical cooperation

Pre-Signing

  • TC 1: Project due diligence to include: (i) a technical review of the proposed operations to improve the water and wastewater services in the City, demand, revenue and operational cost projections; (ii) preparation of technical and functional specifications of the PIP components; (iii) financial and economic analysis of the proposed investments, including cost estimates and the preparation of the financial model; and (iv) environmental and social assessment in line with EBRD’s 2014 E&S Policy and Performance Requirements; and a legal due diligence on the envisaged project structure. The estimated cost of this TC support is up to € 1.6 million, with the average cost of individual assignments is expected to be up to € 270,000, initially with up to 6 projects covered.
     
  • TC 2: Audit and restatement of the Company’s accounts in accordance with IFRS. The estimated total cost of this TC support is up to € 180,000, proposed to be financed by the Bank’s own resources. The average cost of individual assignments is expected to be up to € 30,000, initially with up to 6 projects covered.

Post-Signing

  • TC 3: Project Implementation Support. The TC will support the PIU with procurement, preparation and evaluation of tenders, contract award and administration, financial control, project management and reporting including assistance to the Company in implementation of ESAP and preparation of annual E&S reporting. The estimated cost of this TC support is up to € 4.5 million, with The average cost of individual assignments is expected to be up to € 750,000, initially with up to 6 projects covered.
     
  • TC 4: Corporate Development and Stakeholder Participation Programme. The TC will (i) support institutional development in the form of operational improvements and financial improvements and (ii) implement a Stakeholder Participation Programme. The estimated total cost of this TC support is up to € 2.1 million, proposed to be financed by a bilateral or multilateral donor or the SSF. The average cost of individual assignments is expected to be up to € 350,000, initially with up to 6 projects covered.

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.